Dollar risks rising but Plaza Accord-style coordination not feasible now: ex-IMF adviser

With central banks prioritising domestic objectives, Plaza Accord-style exchange-rate coordination is now out of reach despite growing concerns over the dollar-centred monetary system, complicating the smooth transition to a more multipolar international monetary system, according to a prominent economic historian.Barry Eichengreen, a former senior policy adviser at the International Monetary Fund, said that if erratic US policies and weakening institutional guard rails were to persist for another decade, the probability of an abrupt crisis of confidence in the US dollar would exceed 50 per cent.“I don’t think something like the Plaza Accord of 1985 … is possible in the 21st century,” Eichengreen said, speaking during an online economic lecture on Friday. The accord, widely regarded as a landmark in international monetary coordination, brought major economies together to weaken the dollar through coordinated exchange-rate action.